Stablecoin Gold Rush: A Conversation with Asia's Biggest "Pick-and-Shovel" Play | Linear Voice

This year, a new wave of stablecoin momentum has been building globally. Among the players riding this wave, a unicorn named Cobo has emerged as the largest "pick-and-shovel" provider in the Asia-Pacific region, thanks to its forward-looking technical judgment and accumulated practice.

As an early-stage investment firm focused on frontier technology, Linear Capital is bullish on Cobo's technical capabilities and was the lead investor in its earliest round, with follow-on investments in subsequent rounds. The company began exploring stablecoin payment technology and compliance three to four years ago, and formally launched its stablecoin solution last year.

Recently, we spoke with Alex Zuo, Cobo's Senior Vice President and Head of Payments, about how industry practitioners view this stablecoin boom, what role Cobo plays in it, and what proactive steps they've taken toward compliant stablecoin development.

Recently, as regulation tightens, cross-border payment advantages become apparent, and major institutions enter the fray, a new global wave of stablecoin momentum has been building, pushing stablecoins into the spotlight like never before.

On the capital markets front, on June 5, Circle — the world's second-largest stablecoin issuer — listed on the New York Stock Exchange at $31 per share, surging over 200% intraday on its debut and hitting $298.99 on June 23. To date, Circle's total market cap has exceeded $43 billion. Meanwhile, numerous large corporations and financial institutions are also deploying stablecoins for B2B payments, supply chain finance, and other use cases.

On the policy and regulation front, on May 21, Hong Kong's Legislative Council formally passed the Stablecoins Bill, making it the first jurisdiction worldwide to implement full-chain regulation of fiat-backed stablecoins. On June 17, the U.S. Senate passed the GENIUS Act, marking a substantive step toward American stablecoin legislation. On July 10, the Shanghai State-owned Assets Supervision and Administration Commission Party Committee held a central group study session on the development trends and response strategies for cryptocurrencies and stablecoins.

In this wave of stablecoin momentum, one company named "Cobo" has, through forward-looking technical judgment and accumulated practice, become the largest "pick-and-shovel" provider in the Asia-Pacific region. Founded in 2017 and headquartered in Singapore, Cobo is a leading global provider of digital asset custody and wallet solutions**, currently valued at over $1 billion, placing it in unicorn territory, with** over 500 institutional clients worldwide.

Cobo began exploring stablecoin payment technology and compliance at least three to four years ago, and formally launched its stablecoin solution last year.

Recently, we spoke with Alex Zuo, Cobo's Senior Vice President and Head of Payments, about how industry practitioners view this stablecoin boom, what role Cobo plays in it, and what proactive steps they've taken toward compliant stablecoin development?

Q: Could you briefly introduce the history of stablecoin development?

Stablecoins refer to cryptocurrencies pegged to the value of various fiat currencies. They're actually not a new phenomenon — they've existed since around 2014, driven by the development of cryptocurrency trading.

At that time, a company called Tether launched USDT, which became the first widely adopted stablecoin due to its excellent trading experience. In 2018, Circle launched USDC with compliance as a key differentiator, winning significant trust through high transparency and regulatory audits. Various attempts to issue stablecoins gradually increased. Although the market went through crisis periods such as the Silicon Valley Bank collapse-induced depegging, with improving transparency, regulation, and expanding application scenarios, the stablecoin market has seen new explosive growth. According to a CEX.IO report, stablecoin trading volume reached $27.6 trillion in 2024, surpassing the combined transaction volume of traditional payment giants Visa and Mastercard.

The so-called "stability" is mainly reflected in the value pegging mechanism, which ties to specific assets or algorithmic rules to minimize price volatility. Taking fiat-collateralized stablecoins (such as USDT and USDC, which have the largest market share) as an example, for every 1 stablecoin issued, the issuer must have equivalent fiat assets as backing, undergo regular audits, and allow users to redeem for fiat at the pegged price at any time.

Q: Why have stablecoins broken into the mainstream recently, given recent market conditions?

The global cryptocurrency market has been developing continuously, but this year's mainstream breakout of stablecoins has a lot to do with the Trump administration taking office. As we all know, Trump is a cryptocurrency advocate. In his view, banks remain unfriendly to the crypto market overall — for instance, high friction when withdrawing funds, and banks sometimes even closing accounts. So the so-called GENIUS Act (Guiding and Establishing National Innovation for US Stablecoins Act) was introduced. On one hand, this aims to provide a regulatory framework for stablecoin issuance and reduce systemic risk; on the other hand, with this framework in place, banks can also issue their own stablecoins, enabling them to better embrace this development.

On June 17, the U.S. Senate passed this bill, and it's expected that the House negotiations this week will also yield a result. If this bill moves forward relatively smoothly, a major reason is the belief that stablecoins can help the Federal Reserve with debt reduction — the bill requires stablecoin issuers to hold reserves in U.S. dollar cash or short-term U.S. Treasury bills, thereby converting global stablecoin demand into direct purchasing power for U.S. debt. From this perspective, the U.S. government hopes stablecoins can become a new tool to consolidate the dollar's global dominance. Beyond this, Circle's NYSE listing in June and its secondary market performance have also fueled this stablecoin rally.

But what we find more noteworthy is that governments in Hong Kong and even many places on the mainland have begun discussing stablecoin regulation and use cases. From China's perspective, existing stablecoins are essentially an extension of dollar hegemony. If you go to countries like those in Latin America or Turkey where local fiat currencies are unstable, you'll find locals prefer simple solutions to use a stablecoin equivalent to the dollar — over time, this actually helps internationalize the dollar. So it can be said that stablecoins represent a major trend, and they're also tied to China's RMB internationalization strategy, so they should receive increasing attention going forward.

Q: How large could the stablecoin market become in the future?

China has made numerous attempts with the digital RMB. But we can imagine that stablecoins will likely dominate in the cross-border domain in the future. Especially in many overseas scenarios, getting other countries' fiat channels to connect with CBDCs (central bank digital currencies) currently looks very difficult. But with stablecoins, you only need a digital currency wallet to connect to these tokens, which actually lowers the barrier for RMB internationalization.

This is somewhat like the mobile payment wars back then — why did Alipay and WeChat Pay win? Beyond user base and scenarios, they used QR codes to lower the barrier to entry. At the time, there were many third-party payment companies using devices like boxes or SIM card modules, but most ultimately failed.

In cross-border payment scenarios, promoting CBDCs would involve significant integration development. But connecting to stablecoins really only requires a wallet — these ledgers are public, and the barrier to use is very low. So we predict stablecoins may supplement the overseas portion of RMB going global, while returning to domestic settlement may still use CBDCs to complete final network entry.

As for market estimates, Standard Chartered published a report predicting that stablecoin supply could reach $2 trillion by 2028. When I first saw it, I thought it might be overly optimistic, but looking at it now, perhaps just the U.S. alone could reach that scale, and China's future moves may bring additional growth. From what we understand, China currently has at least three types of large companies (internet giants, banking groups, and cross-border payment companies) exploring this area. What we need to wait for is more regulatory policy to promote healthy, orderly industry development.

Q: How did Cobo identify the opportunity in stablecoin transactions?

Cobo was founded in 2017, initially aiming to build a personal digital asset wallet — essentially "Web3's Alipay." As numerous digital asset platforms emerged, we gradually discovered a common need: a foundational wallet that could connect to different chains and different tokens, while also managing these digital currencies, particularly in terms of risk control. So responding to market demand, we pivoted to institutional digital asset wallets — what we now call custody services, or "Wallet As a Service."

About two years ago, we developed an MPC (Multi-Party Computation) wallet. The difference from previous wallets is that before, Cobo managed private keys in a centralized manner, while MPC is essentially a self-custody model where we split the private key into three shards — the customer holds two, Cobo holds one. Through this model, we actually opened up a larger market, because when many clients apply for their own licenses or when our existing licenses can't cover their business needs, they adopt this approach, which is more flexible and gives them greater regulatory control.

The decision to build out stablecoin business also emerged from market demand. Cobo had already accumulated certain capabilities in stablecoin payment technology and compliance over the previous three to four years. In the second half of last year, an increasing number of cross-border payment companies proactively approached us, because in their actual operations they couldn't avoid certain transactions involving digital assets. To better manage compliance, they needed an institution like ours to help them with stablecoin receipt, disbursement, and exchange.

After this year's Spring Festival, the Hong Kong Monetary Authority launched its stablecoin issuer sandbox, and among the companies that passed testing, some publicly disclosed partnerships with Cobo. This led even more companies to approach Cobo for technical collaboration.

Q: Why do clients proactively choose to work with Cobo?

First, from a team DNA perspective, Cobo's co-founder and CTO Dr. Changhao Jiang is widely recognized as a technical heavyweight in the industry, like Linear's Harry — both were early Chinese employees at Facebook. In 2013, he returned to China to build the country's first digital currency wallet. After founding Cobo, he has continued driving technical innovation to simplify enterprise digital asset security. Our other co-founder and CEO Shenyu is also a well-known early pioneer in the cryptocurrency space. Our entire team is engineer-dominated; our technology is not only distinctive but also has very low underlying technical turnover.

Second, Cobo has long focused on digital currency asset management. This focus leads to deeper understanding of chains, blockchain fundamentals, and asset security than most companies. This awareness is embedded in our daily security consciousness and preventive measures — we believe prevention outweighs post-incident remediation. Cobo has an internal "zero-trust mechanism" — for example, we conduct regular red-white team exercises attacking our own employees to see if they reuse passwords. And we've also done relatively well on licensing and audit certifications. Honestly, custody isn't a particularly profitable business, and many competitors from the same period haven't survived. But due to the founding team's own financial strength, plus continued investor trust, years of focused effort have yielded genuinely solid business development.

Third, in terms of specific product services, we not only lower client usage barriers through chain abstraction, but can also provide multi-technology custody solutions tailored to their actual needs, helping clients better manage compliance in their early engagement with this business. We can also help clients connect with banks. And some clients come to us because they have stablecoin distribution needs — Cobo's accumulated merchants and independent sites can help them rapidly circulate these stablecoins.

And, looking at future development trends, while the entry of payment giants like Stripe may bring certain competitive pressure, in terms of market-oriented digital asset custody, our accumulated first-mover advantage and credibility backing remain quite pronounced. Custody business is somewhat like insurance — the longer an insurance company has existed, the more trust we tend to place in it.

Q: How does Cobo position itself in the stablecoin market?

Cobo is currently the largest professional digital asset custody company in the Asia-Pacific. We have consistently focused on underlying infrastructure for the industry, particularly wallet-related infrastructure, tested over extended periods by the market with long-term client trust.

In the digital asset world, security is an especially important issue. The biggest difference from traditional finance is that while you can manage your digital assets yourself and store them on-chain, if you lose them one day, they're simply gone. So having a secure, stable wallet to manage these digital assets becomes particularly important. Cobo plays more of a "pick-and-shovel" role in the development of stablecoins. Outside of Europe and America, Cobo is the largest professional custody institution in the Asia-Pacific region, with leading positions in client numbers and assets under custody, so quite a few institutions have recently approached us for potential collaboration.

We've found that initially, most basically wanted to convert between digital currencies and fiat — a relatively shallow scenario. But after starting to use our wallets, many clients also wanted to deepen their scenarios, including merchant acquiring, cross-border payroll, and other applications, requiring more customized development. Payment clients differ significantly from crypto-native clients — they have weaker understanding of security and chains, but higher expectations for compliance, product scalability, and long-term business development, even considering future license applications and such. This requires us to make deeper optimizations to our products and services:

First, we've done considerable chain abstraction to lower client usage barriers. For traditional enterprises with limited Web3 understanding, both conceptual comprehension and specific operations have high barriers. Through chain abstraction, we conduct transfers and payments on a U-denominated basis (settlement based on USD or stablecoins), further lowering barriers.

Second, outstanding anti-money laundering and compliance capabilities. Payment clients are very afraid of encountering illicit on-chain funds and highly concerned about on-chain fund compliance, so our products have been simplified at deeper levels. Cobo's greatest advantage is that we're the only company globally doing both centralized custody and MPC self-custody. Many clients now primarily use MPC, and Cobo can combine the advantages of centralized custody with MPC self-custody, exporting our centralized custody compliance capabilities to MPC clients — effectively providing on-chain anti-money laundering services to help them further reduce risk.

Additionally, entire cross-border payment involves three layers: stablecoin-receiving wallets, acceptance/conversion, and bank accounts. Payment companies may be strong in acceptance and banking, but still quite apprehensive about the unfamiliar territory of connecting to digital currencies. Cobo introduces partners to these traditional payment institutions, and as a licensed entity in Hong Kong ourselves, we have licensed trust accounts to help clients solve problems.

Q: What new opportunities might emerge from the stablecoin gold rush?

In the short term, Cobo's core business remains custody and wallets — our most fundamental business model is charging service fees based on transfer amounts of assets under custody. But in the long term, we will certainly leverage platform value to deepen scenarios.

Stablecoins have attracted attention from the real financial world beyond the digital asset world because of genuine usage needs in many places. For example, many merchants doing trade exports in Africa — after settling locally, their money sits in local bank accounts, but due to exchange rate instability, this money keeps depreciating, so many convert to stablecoins. Many people initially used stablecoins to cope with local exchange rate fluctuations, but as more people hold stablecoins, they begin using them in daily consumption and salary transfers. So over time, this creates significant network effects.

It follows that as more money moves on-chain, more technical problems will need solving. For instance, how to exchange between so many types of stablecoins in the future? How to use smart contract wallets to subscribe to various services? What will future trust forms look like? What changes will new tax forms bring? These various derived situations could all bring entrepreneurial opportunities. But we believe whatever opportunities emerge, they'll need an underlying wallet like Cobo's.

Q: What challenges will stablecoins face in healthy development?

As a major import-export trading nation, China maintains relatively strict foreign exchange controls, so regulators certainly need to guard against capital outflows through digital world channels. So promoting stablecoin compliance and regulation is certainly a major trend. Another regulatory concern is on-chain illicit funds — for instance, serving overseas hackers, sanctioned countries, or even terrorists. Anti-money laundering is a particularly important aspect of stablecoin development that needs attention. But fortunately, on-chain activity is relatively public and transparent, and there are quite a few intelligence tools for on-chain transfer analysis. So in this regard, compared to other forms, it's actually more convenient to regulate.

Currently, perhaps 40-50% of American e-commerce sites may have stablecoin options, and interbank settlement also uses stablecoins. As these scenarios slowly penetrate like capillaries, this will certainly challenge traditional banks. How regulators will balance this going forward is also worth continued attention.

Q: What proactive efforts has Cobo made in stablecoin development?

First, actively using technology to help large enterprises and institutions explore stablecoin-related business. From our observation, many large internet companies were still in a wait-and-see mode months ago, not rushing to apply for stablecoin licenses. But recently, influenced by Circle's listing and JD.com's stated intentions, everyone has begun actively pushing forward related work. This includes both certain internet giants, leading cross-border payment companies, and international banks. In this process, they actually need support from multiple parties including law firms, consulting firms, and technical service providers. Cobo can provide technical support on one hand, and on the other hand, can help them rapidly distribute stablecoins in the future, expand business scope, and build stablecoin circulation scenarios.

Second, on the compliance front, we're also actively responding to global regulatory requirements, pursuing additional relevant licenses in various jurisdictions. Meanwhile, we continue elevating company technical standards, including conducting rigorous audits and certifications.

Additionally, we're working to become a bridge between regulators and clients. We help enterprises hoping to explore stablecoins communicate with regulators, understanding what licenses, qualifications, and scenarios are needed when conducting business. We also help payment company clients clarify how they should apply for future issuance licenses.

Stablecoins are not a short-term speculative concept — they represent a systematic reshaping of global value circulation architecture. If Hong Kong can successfully complete stablecoin system construction, finding balance between regulation and industry, it can not only attract international projects to land but also potentially become a harbor for new financial innovation. The same applies to explorations elsewhere.

Returning to Cobo itself, our advantage lies in wallets and infrastructure. We hope to use the digital wallet as a technical starting point, not only to build a complete service network that lowers barriers for stablecoin use; but also through active cooperation with regulators, promote stablecoin adoption on compliant tracks, genuinely improving efficiency and convenience in global payment and collection scenarios.